A deal to lower interest rates on student loans passes in the Senate. It was approved Wednesday with an 81 to 18 vote. Our Erin Connolly has more on what this means now and in the future.
CAPITAL REGION, N.Y. -- It could be less expensive for college students to borrow money this fall. This, after the Senate passed a deal to lower interest rates on student loans.
Hugh Johnson, the Chairman and CIO of Hugh Johnson Advisors, said, "You know, your first reaction when you hear any agreement, bipartisan agreement, from Washington, I don't want to say shocked, but I will say surprised.''
The proposal would tie federal college loan rates to the financial markets. This means for the next few years, student loans would have lower interest rates.
Johnson said, "It injects something market based into the plan and that's really good for taxpayers.''
At Siena College, where 85 percent of the students utilize federal student loans to fund some of their educational expenses, this latest development is welcome news.
Mary Lawyer, the Associate Vice President of Siena College Enrollment Management, said, "It puts our families under less stress. It will decrease the amount of debt students have, which means they will have better opportunities pay their loans back when they graduate.''
While many say this bill is good for students and taxpayers, they say interest rates are likely to rise in the future.
Lawyer said, "The cost of higher education has to be addressed in some way and we need to be conscious of that as we go forward.''
Johnson said, "A lot of students will be complaining in a two to three year period and I think you'll see students complaints and then they'll have to revisit it. To some extent, it's a band aid and not a solution.''
The House is expected to vote on the bill next week. If passed, it will head to the President's desk to be signed into law.